NAICOM Warns Insurance Brokers Against Unethical Practices

The National Insurance Commission has warned registered insurance brokers against engaging in unethical practices.

The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr Sunday Thomas gave the charge on Thursday at the National Council of Registered Insurance Brokers Chief Executive Officers’ Retreat.

The theme of the retreat was “X-Raying the Finance Act 2020.”

Thomas described the insurance industry as vital for the development of the economy, adding that while the sector is faced with challenges particularly that of the Coronavirus pandemic, the lack of adherence to insurance practice is making it difficult for the sector to effectively achieve its objective.

However, he added that the Commission would do all it could, including working with the leadership of NCRIB to address the challenges facing the sector

He said, “Let me task you on business etiquette and ethics in all your
professional dealings.

“Note that the unprofessional conduct of a few amongst you is
posing great danger to our collective integrity as an industry.

“Over the years, a lot has
been put into improving the fragile image and perception of insurance in this country.

“It is high time we all rise up to the menace of unethical business behaviour in our sector.

“As the insurance industry positions itself for Post Covid-19 era, the demand of the
insuring public will require sound work ethics for us to optimize performance as intermediaries, business sincerity and customers’ satisfaction must be central to
your core business principles.

“The Commission has always and will at all-times extend her full support to all
stakeholders in the industry in their drive for business growth and development.

“The
Commission is open to new ideas and shall continue to introduce new reforms and
initiatives in line with international best practices that will strengthen our institutions.”

The NAICOM Boss described the theme of the retreat as apt and could not have
come at a better time than now when the heat of the COVID-19 pandemic is taking its
toll on the financial services sector.

He said the previous tax laws were quite stringent on insurance operators in a manner that permitted double taxation by taxing investment income and policyholders’
funds; and allowed tax losses to be carried forward only for a maximum of four years of
assessment contrary to what was obtainable in other businesses.

He also said the previous tax laws ensured that
tax deductible claims and other outgoings were limited to 25 per cent of total premium
for general business, in contrast to what was obtainable in other businesses
and did not allow a full tax deduction on unexpired risk provision in relation to the
financial year.

He expressed optimism that with the level of professional expertise of NCRIB members, they would be able to come up with innovative solutions to tackle the challenges facing the insurance industry.